Engineering firm goes into voluntary administration owing $2m
QUEENSLAND'S mining services capital of Mackay and its resources resurgence have taken a hit with a longstanding local company going into voluntary administration.
Ricbuilt Heavy Industries, a leading engineering company with a strong reputation in the mining services sector, owes creditors more than $2 million.
Administrator Frank O'Neill from insolvency firm SV Partners said Ricbuilt's financial options were being assessed, including the sale of all or part of the business.
Meanwhile, he said the company was continuing to trade and it was "business as usual" for its 32 staff.
Mr O'Neill and SV Partners colleague David Stimpson were appointed administrators last Friday of Kaylah Pty Ltd, trading as Ricbuilt Heavy Industries.
He said the reasons for the company's failure were "a number of unprofitable contracts, costs associated with the wind down of its labour hire business in WA and working capital pressures''.
"We are aware of 15 creditors owed just over $2 million and that includes moneys owed to statutory bodies like the Australian Taxation Office and Office of State Revenue."
Nevertheless, Mr O'Neill said he was "quietly confident" given the strong management team that the company could navigate its way out of tough economic conditions and "achieve a successful restructure with minimal disruption to its customers and employees".
"It's actually quite fortunate because Mackay is in a lot more optimistic space than regions such as the Gold Coast and Cairns, which are really reliant on tourism," he said.
"Also, we're dealing with a very well recognised brand … and the timing is such that if the expected government spending goes ahead with regard to infrastructure they will need coal, they will need steel and that will be sourced from Central Queensland so it's in a good place."
According to Ricbuilt's website, the company was established in 1998 and is based at Paget in Mackay's south. It services the mining, civil, rail, port and heavy transport industries with both Australian and overseas clients.
"It's never good when a company goes into any kind of restructure," Mr O'Neill said. "But
but this is a voluntary restructure with a co-operative management team taking the appropriate steps to achieve the best outcome for all stakeholders.
"We are confident a sale or partial sale of the business can be completed over the next couple of months with minimal disruption to customers and employees."
Queensland Resources Council chief executive Ian Macfarlane recently said Mackay would be the state's "standout economic performer" after the coronavirus crisis.
"As it is now, mining in Queensland and Australia is a crucial industry," Mr Macfarlane told Mackay's Daily Mercury.
He said Mackay's enviable status post-pandemic would come down to the region's position as a service centre for the Bowen Basin.
"More than $12 billion a year goes into Mackay from the resources industry, so that's a big number," Mr Macfarlane said.
Originally published as Mining engineering firm goes into insolvency owing $2m